Donald Trump’s son-in-law bought part of old New York Times
building
from Soviet-born tycoon, Guardian investigation into Russian money in
NYC property market finds

Jared
Kushner, the son-in-law of Donald Trump, who acts as his
senior White House adviser, secured a multimillion-dollar Manhattan
real estate deal with a Soviet-born oligarch whose company was cited in
a major New York money laundering case now being investigated by
members of Congress.

A Guardian investigation has established a series of
overlapping ties and relationships involving alleged Russian money
laundering, New York real estate deals and members of Trump’s inner
circle. They include a 2015 sale of part of the old New
York Times building in Manhattan involving Kushner and a
billionaire real estate tycoon and diamond mogul, Lev Leviev.

The ties between Trump family real estate deals and Russian
money interests are attracting growing interest from the justice
department’s special counsel, Robert Mueller, as he seeks to determine
whether the Trump campaign collaborated with Russia to distort the
outcome of the 2016 race. Mueller has reportedly
expanded his inquiry to look at real estate deals involving the Trump
Organization, as well as Kushner’s financing.

Kushner will go before the US Senate intelligence committee on
Monday in a closed
session of the panel’s inquiry into Russian interference in
the election in what could be a pivotal hearing into the affair.

Leviev, a global tycoon known as the “king of diamonds”, was a
business partner of the Russian-owned company Prevezon Holdings that
was at the center of a multimillion-dollar lawsuit launched in New
York. Under the leadership of US attorney Preet Bharara, who was fired
by Trump in March, prosecutors pursued Prevezon for allegedly
attempting to use Manhattan real estate deals to launder money stolen
from the Russian treasury.

The scam had been uncovered by Sergei Magnitsky, an accountant
who died in 2009 in a Moscow jail in suspicious circumstances. US
sanctions against Russia imposed after Magnitsky’s death were a central
topic of conversation at the notorious Trump
Tower meeting last June between Kushner, Donald Trump Jr,
Trump campaign manager Paul Manafort and a Russian lawyer with ties to
the Kremlin.

Donald Jr and Manafort have been called to testify before the
Senate judiciary committee on Wednesday, at which they are certain to
face questions about the Trump Tower encounter.

Two days before it was due to open in court in May, the
Prevezon case was settled
for $6m with no admission of guilt on the part of the defendants. But
since details of the Trump Tower meeting emerged, the abrupt settlement
of the Prevezon case has come under renewed scrutiny from congressional
investigators.

Four Russians attended the meeting, led by Natalia
Veselnitskaya, a lawyer with known Kremlin connections who
acted as legal counsel for Prevezon in the money laundering case and
who called the $6m settlement so slight that “it seemed almost an
apology from the government”. Sixteen Democratic members of the House
judiciary committee have now written
to the justice department in light of the Trump Tower meeting demanding
to know whether there was any interference behind the decision to avoid
trial.

Constitutional experts are also demanding an official inquiry.
“We need a full accounting by Trump’s justice department of the
unexplained and frankly outrageous settlement that is likely to be just
the tip of a vast financial iceberg,” said Laurence Tribe, Harvard
University professor of constitutional law.

Separately, the focus of investigators on Trump family
finances stem from the vast flow of Russian wealth that has been poured
into New York real estate in recent years. As Donald
Trump Jr put it in 2008, referring to the Trump Organization:
“We see a lot of money pouring in from Russia.”

Among the overlapping connections is the 2015 deal in which
Kushner paid $295m to acquire several floors of the old New York Times
building at 43rd street in Manhattan from the US branch of Leviev’s
company, Africa Israel Investments (AFI), and its partner Five Mile
Capital. The sale has been identified
as of possible interest to the Mueller investigation as Kushner later
went on to borrow $285m in refinancing from Deutsche Bank, the German
financial house that itself has been embroiled in Russian money
laundering scandals and whose loans to Trump are coming under intensifying
scrutiny.

Court documents and company records show that AFI was cited in
the Prevezon case as a business partner of the defendants. In 2008,
Prevezon entered a partnership
with AFI in which Prevezon bought for €3m, a 30% stake in four AFI
subsidiaries in the Netherlands. Five years later, AFI tried to return
the money to the Russian-owned company, but it was intercepted and
frozen by Dutch authorities at the request of the US government as part
of the Prevezon money-laundering investigation.

In Manhattan, Leviev’s firm also sold condominiums to Prevezon
Holdings from one of its landmark developments at 20 Pine Street, just
a few blocks from Wall Street.

Real estate brochures
describe the lavish interior decor of the condominiums, replete with
bathrooms bedecked in stone and exotic woods, and boasting “the
ultimate in pampering; a sybaritic recessed rain shower”. The 20
Pine Street apartments that Leviev sold
to Prevezon were later frozen
by US prosecutors seeking to block the flow of what they alleged to be
money stolen from the Russian treasury and laundered through New York
real estate.

Prevezon’s 20 Pine Street apartments and €3m in assets were
all released as part of the settlement
in May 2017.

The Guardian contacted both Kushner and Leviev for comment,
but they did not immediately respond.

The pursuit of Prevezon Holdings for alleged money laundering
took on enormous political significance as it unfolded. For the
prosecutors, it was a test case over suspicious Russian money flows
designed to show the US was serious about going after money launderers.
For the Russians, it was an opportunity to push back against stringent
US sanctions that had long infuriated the Kremlin.

In court documents,
US prosecutors accused Prevezon and its sole shareholder, Denis Katsyv,
of participating in the laundering of proceeds of the vast tax fraud
that stole $230m from the Russian treasury and moved it out of the
country in chunks. Prevezon was alleged to have received some of the
fraudulent spoils through a network of shell companies, hiding the
money by investing in Manhattan real estate including the Leviev
condominiums in 20 Pine Street.

Prevezon and Katsyv have consistently denied any involvement
in money laundering and have dismissed the lawsuit as “ill-conceived”.
In a statement released at the time of the settlement, they said they
had “no involvement in or knowledge of any fraudulent activities”.

Magnitsky discovered the massive tax fraud, said to be one of
the largest in Vladimir Putin’s Russia, in 2007. After he blew the
whistle on the scam, he was arrested by the same officials whom he had
accused of covering up the racket and imprisoned, dying in jail having
been denied medical treatment.

Magnitsky’s death led to a political backlash in the US that
in turn spawned tough sanctions on Russia, known as the Magnitsky Act.
Russian individuals associated with the lawyer’s demise and other human
rights abuses were banned entry to the US.

Veselnitskaya not only acted as Prevezon’s Russian counsel in
the money-laundering case, she also was a leading lobbyist against the
Magnitsky sanctions. She raised the subject prominently at the meeting
in Trump Tower with Don Jr and Kushner, though according
to Veselnitskaya the president’s son-in-law left after 10 minutes.

By the time of the Trump Tower meeting, Veselnitskaya was
already personally acquainted with Russia’s powerful prosecutor
general, Yuri Chaika, and her lobbying against the Magnitsky sanctions
had drawn significant attention in government circles.

“Natalia’s main role was coordinating, including regular
coordination with Chaika, whom she knew personally,” said a source
acquainted with the Prevezon case.

Veselnitskaya told the Guardian: “My meeting with Trump’s son
was a private meeting; nobody in the government had anything to do with
it.” She declined to answer a follow-up question about whether and how
she knew Chaika.

Jamison Firestone, the founder of the Russian law firm that
employed Magnitsky at the time that he exposed the fraud, said that
Veselnitskaya clearly intended to use the Trump Tower meeting to lobby
against the Magnitsky sanctions. “They really made it a state priority
to get rid of these sanctions,” he said.